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A Jos. A. Bank sign in Dallas, Texas.

In a surprising turn of events, announced a $1.2 billion bid to acquire . The proposal comes less than two months after Men's Wearhouse, the larger of the two retailers, rejected an unsolicited $2.3 billion offer from Jos. A. Bank.

Under the new proposal, Men's Wearhouse would pay $55 per share in cash for Jos. A. Bank, representing a 32% premium over the smaller retailer's closing share price on October 8, 2013, the day before Jos. A Bank's initial proposal. According to Men's Wearhouse its scale provides an advantage as the acquirer, as no third-partyequity investment would be necessary. The company plans to finance the merger using cash on its balance sheet and debt financing.

The combined shops would be the fourth largest men's apparel retailer in the country with 1,700 locations. Jos. A. Bank would continue operating with it's current name and locations.

In an open letter to the chairman of Jos. A. Bank's board, Men's Wearhouse CEO Douglas Ewert wrote, "Following Jos. A. Bank's unsolicited public proposal to acquire Men's Wearhouse, our Board of Directors evaluated a number of alternatives to deliver value to our shareholders. After a thorough review, our Board concluded that an acquisition of Jos. A. Bank by Men's Wearhouse has strategic logic and the potential to deliver substantial benefits to our respective shareholders employees and customers."

The company notes that the merger would be accretive to its earnings with potential fro $100 million to $150 million in benefit to shareholders. Men's Wearhouse estimates combined sales would reach $3.5 billion.

Following the news Men's Wearhouse shares opened up 7.7% at $50.71. Jos. A. Bank shares opened up 11.9% at $56.63.